BACK TO BASICS FINANCES DAY 3

Budgeting Part 2

Ok, so we have all our bills, figured out the amounts, and asked ourselves why on the amounts.  Now, let’s start the budgeting thing. 

Isaiah 55:2 “Why spend money on what is not bread, and your labor on what does not satisfy? Listen, listen to me, and eat what is good, and you will delight in the richest of fare.”

Let’s take a look at one way of doing a budget.  My Dad, who is the wisest man I know, always has great advice on budgeting.  His advice is this: never spend more than you make, and don’t get yourself into a debt you cannot get out of.  I see you nodding your heads in agreement!  I told you my daddy is smart!  He also always said, you pay before you play.  What does that mean?  I am so glad you asked!

If you bring home say, $20/week, and you have a bill that must be paid, and it costs $10, but your friend has invited you to a concert that only costs $15 dollars.  Do you go?  Or maybe that cute pair of shoes (my personal weakness) is finally on sale, for $19 AND you have a 10% off coupon, do you buy them?  Remember, the bill MUST be paid, or you will incur finance charges, so what do you do?  According to my Dad, you pay the bill.  Is it as much fun as the concert or those shoes?  Maybe not, but you won’t have to pay more on the same bill for not paying it in the first place.

Personal testimony time!  I got myself into some trouble about 17 years ago with credit cards.  I ran up a lot on just one, but never looked at the total, only the amount due.  Have you done that?  The problem with it is you can keep spending more on your credit card, and the minimum amount due only goes up a little bit.  Needless to say, when my husband found out (no I did not tell him, he found out when we were buying our home in NY), he was not a happy camper.  So now, I only use credit cards for gas, car repairs, and prior approval from him.

Why did I bring up my credit card abuse to you?  Because too many of us do it!  We don’t have the money to buy what we want, so we charge it!  Ane then when we max out one card, we can get another one so we can keep buying stuff we do not need.  We may want it, but we do not need it.  Remember that old expression rob Peter to pay Paul?  I know people who use one credit card to pay off another one.  It’s sad, because the debt mounts and the frenzy continues.

Ok, so maybe you are thinking what’s the big deal?  I only ran up $1,000 on one card, and I pay the minimum every month, and haven’t charged anything else on it.  Ok, good for you, but did you know, depending on the interest rate your credit card company charges you, just by paying the minimum, it will take you 10 years to pay it off!  That, my friends, is crazy.  My dad calls that fools money.  I am not saying you shouldn’t have a credit card.  What I am saying is if you use one, pay off the entirety each month.  If you can’t, then cut that card up,do NOT get another one and do your best to pay it off.  Too many people have lost their homes and sometimes their marriages all due to credit card debt.  Nothing is worth that, nothing.

 Matthew 6:24 “No one can serve two masters. Either you will hate the one and love the other, or you will be devoted to the one and despise the other. You cannot serve both God and money.”

Ok, so back to budgeting.  The first thing you need to do is designate the amount of money that goes out each week/month.  The ones we cannot do much about is mortgage, rent, and utilities.  The rest we can.  I am going to borrow the envelope system from Dave Ramsey.  No, I am not telling you to go out and buy his books I am just using it as an example of how to get yourself and your family on a strict budget without overspending.  Ready?  Let’s begin.  (the following is taken directly out of Dave Ramsey’s Guide to Budgeting book)  (as an aside, this budgeting plan does not include the use of credit cards.  We are trying to stay out of debt remember?)

Use the envelope system for items that tend to bust your budget.

 Common examples include:

• Food (grocery store)

• Restaurants

• Entertainment

• Gasoline

• Clothing

You don’t have to save up any money to start using  the envelope system. Here’s how you do it. Let’s say you have budgeted $500 a month for groceries. When you receive your paycheck, write yourself a check for $250, cash it, and put the cash in an envelope. On that envelope, write “groceries.” No money—and we mean NO MONEY—comes out of that envelope except to pay for food at the store.  If you go food shopping and leave the envelope at home by mistake, turn the car around and go back to the house to get it.

Make sure to take enough money to cover your groceries for that trip. If you take $150 and you tally up a bill for $160, take some things out of the cart. Bring any change back and put it in the envelope. When you get paid again, write another $250 check. That’s your $500 for the month for food. If you want to go to the store but don’t have enough money, then raid the fridge for leftovers.

Getting a Reward

If you have money left over in an envelope at the end of the month, congratulations! You came in under budget for that item that month. So for that, it’s all right to celebrate (within reason). Reward yourself if you’d like by going out to dinner or rolling the money over to the next month so you have an extra big food budget.

Getting that reward is important because it keeps your spirits up. It’s tough to live on a beans-and-rice lifestyle. But you’re making it work! Great job!

 Don’t Cheat on Your Envelopes!

Be careful not to borrow from other envelopes. When it comes to the envelope system, it can be very tempting to borrow cash from one envelope to fund some other activity. For example, if you use up all your “eating out” money, don’t be surprised if some inner voice tells you to reach behind that envelope for the one that’s marked “clothing.”  C’mon … just a little … it won’t hurt you. You must remember that the very purpose of the envelope system is to curb your spending and teach you discipline. When you run out of grocery money, you eat leftovers instead of going food shopping. If you see your gas money is slipping away faster than the remaining days of the month, then limit your trips or even carpool. If you have a crisis come up in the middle of the month or something happens and you absolutely have no other choice but to shift envelope funds around, then call an emergency budget committee meeting with your spouse. Talk to each other and figure out the best course of action, adjust the budget, and be in agreement on it. Both of you must be involved; it’s a committee decision.

Seems simple enough doesn’t it but budgeting is not going to be easy, if it were, everyone would be doing it, and we would not be in the financial shape we are in.  Remember, God wants us to be good stewards of all the gifts He has given us, and that includes our finances.  And remember, getting that pay raise, or winning the lottery will not change your finances, it will only increase your spending.  Get on a budget and stick to it!  I’ll be praying for all of you for financial wisdom!

 Ecclesiastes 5:10 “Whoever loves money never has enough; whoever loves wealth is never satisfied with their income. This too is meaningless.”

  Questions

1. What do you think is going to be the hardest part about doing a budget?

2. Where do you see yourself overspending and how can you curb that?

Created for the Gift of the Home Group by Kirsten Dreiling

Come join us for encouragement and support at https://www.facebook.com/groups/GiftoftheHome/

envelopes

 

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